Obstructive sleep apnea (OSA) is characterized as mild, moderate, or severe according to the number of respiratory disturbances per hour of sleep (RDI) as defined by the American Academy of Sleep Medicine. Continuous positive airway pressure (CPAP) is the primary treatment for sleep apnea. The column of pressure delivered to the upper airway by this device immediately eliminates the respiratory disturbances when it is applied. There is evidence from randomized controlled studies that CPAP also improves functional status, and the key manifestation of OSA, excessive daytime sleepiness, in individuals with severe OSI, i.e., RDI >30. However, there has been limited work exploring improvement in functional status in patients with less severe OSA, i.e., those with mild (RDI 5-15) or moderate (RDI 16-30) disease. The large placebo effect that has been reported in controlled studies of functional outcomes associated with OSA mandates the need for a placebo in investigations evaluating the true impact of this treatment. Results from the three randomized controlled studies in milder OSA that have examined this issue have been equivocal principally because of serious methodological limitations. It remains unclear whether CPAP treatment improves daily functioning in those with milder disease (RDI 5-30). This is a critical issue as this level of disease severity represents the largest segment of OSA and comprises 15% of the US population. Using Granger's model of functional assessment our primary aim is to determine whether functional status improves in patients with milder OSA following CPAP treatment. We will employ a randomized placebo-controlled parallel groups design using a sham-CPAP device as the placebo in a large sample manifesting significant daytime sleepiness. We will test the hypothesis that the change in functional status (measured by the Functional Outcomes of Sleep Questionnaire) after 8 weeks of treatment will be greater for patients treated with active CPAP compared to sham CPAP. Secondary aims of the study are: 1) to examine whether CPAP also improves daytime sleepiness; 2) to determine whether CPAP can reduce nocturnal blood pressure to lower the risk for stroke and hypertension linked to OSA.